statement of honorable donald c. winter secretary of the navy

NOT FOR PUBLICATIONUNTIL RELEASED BY THEHOUSE ARMED SERVICES COMMITTEESTATEMENT OFHONORABLE DONALD C. WINTERSECRETARY OF THE NAVYBEFORE THEHOUSE ARMED SERVICES COMMITTEE6 MARCH 2008NOT FOR PUBLICATIONUNTIL RELEASED BY THEHOUSE ARMED SERVICES COMMITTEE

The Secretary of the Navy’s FY 2009 Posture StatementThe Navy and Marine Corps Team…fighting today and preparing for futurechallengesI. IntroductionChairman Skelton, Congressman Hunter and Members of the Committee, it is an honor toappear again before you representing the men and women of the United States Navy and theUnited States Marine Corps—active, reserve, and civilian—a force of over 800,000 strong.I am here to present the Department of the Navy’s (DON) plan to support our Sailors andMarines in their mission to defend our Nation against current and future challenges as theyconduct operations spanning the spectrum, from major combat to humanitarian assistance. ThePresident’s Fiscal Year (FY) 2009 Budget will assist the Navy and Marine Corps inaccomplishing their complimentary and reinforcing missions, while building capabilitiesnecessary to meet future threats. The FY 2009 budget balances capabilities to support bothtraditional and irregular warfare demands. It also continues to expand the Marine Corps’capacity and furthers the transformation from a blue water navy into one that can fight and winin the blue, green, and brown waters.As I reflect upon my time as Secretary of the Navy, nothing is more sobering than theexperience of seeing—every single day—the dedication, professionalism, and willingness tosacrifice shown by our Sailors, Marines, civilian employees, and their families. I will attest toyou their unwavering commitment to duty. These patriots put themselves in harm’s way toprotect our Nation. From those who have given the ultimate sacrifice, such as Medal of Honorrecipients Lieutenant Michael Murphy and Corporal Jason Dunham, to those who daily take thepledge to support and defend our Nation, our Navy and Marine Corps Team is second to none. Itis because of their efforts that we are making progress fostering maritime security, defeatingterrorist networks, progressing towards a stable Iraq, supporting the Afghan government,countering piracy and the proliferation of deadly technology, giving humanitarian assistance topeople in need after Tsunamis and earthquakes, and strengthening partnerships around the world.The men and women of the Navy and Marine Corps have responded when called upon. It is anhonor and privilege to work with them and support them as their Secretary.Today our Nation is faced with a myriad of challenges and uncertainties across the globe.There have been several unexpected, and sometimes sudden, changes in the security environmentover the past few years. Yet many of the strategic imperatives of the United States—particularlywith respect to the maritime environment—remain unchanged. It is clear the United States musthave the capacity to act in such a fluid and unpredictable environment, and that Naval forcesoffer unique flexibility to respond swiftly and decisively anywhere in the world. Providing thisflexibility requires that the Department of the Navy invest wisely across a wide range ofcapabilities, and that we take care to deliver a balanced portfolio of capabilities to the Joint force.2

Worldwide presence, credible deterrence and dissuasion, projection of power from navalplatforms anywhere on the globe, and the ability to prevail at sea are the critical, mostfundamental elements of the Navy and Marine Corps strategic posture; these are ourindispensable contributions to the joint warfighting capability of the Nation.The United States is a maritime power, bounded by sea to the east and west. The health of ournational economy depends on assuring safe transit through the seas—and the maritimedimension of international commerce is ever increasing. Consider that 70 percent of the earth iscovered by water, 80 percent of the world’s population lives in close proximity to the coast, and90 percent of the world’s international commerce is transported via the sea. Given our nationalinterests, and the role we play in the world, it is unsurprising that our Sailors and Marines areconstantly called upon to react to a wide range of challenges. I suggest that the strength of anation’s naval force remains an essential measure of that nation’s status and role in the world. Ialso submit that maritime dominance by the United States remains vital to our national security,to our position in the world, and to our ability to defend and promote our interests.Last fall, the Department of the Navy, in collaboration with the U.S. Coast Guard, reaffirmedits emphasis on the traditional capabilities of forward presence, deterrence, sea control, andpower projection in its new Maritime Strategy: A Cooperative Strategy for 21 st CenturySeapower. However, the Maritime Strategy also makes clear that we consider our corecapabilities to include maritime security and the provision of humanitarian assistance anddisaster relief—areas of growing importance. The strategy emphasizes the use of soft power,and highlights the criticality of our foreign friends and allies, while reminding us that theunderlying credibility for partnerships and peace is the United States’ ability to swiftly defeat athreat with overwhelming and decisive combat power.The unique nature of our Department is such that the Navy and Marine Corps team is aconstantly deployed force, both in peacetime and in war, with the further ability to surge assetsworldwide, anytime required. As we consider the current and projected strategic environment,we must anticipate a steadily growing reliance on our unique expeditionary character. This isbecoming ever more apparent. The challenge of resourcing our two services across such a largerange of steadily growing global missions, from partnership building to combat operations, isone that we have met with the President’s FY 2009 Budget.Reflected in the Budget submittal is the fact that today’s Navy and Marine Corps areoperating in blue, green and brown waters, in the air and on the shore—and sometimes deepinland—facing a wide variety of threats. On any given day, approximately 40 percent of thefleet is deployed at sea or involved in pre-deployment training. Forward deployed carrier andexpeditionary strike groups operate on the high seas, unencumbered by constraints facing landbasedforces. They are providing our combatant commanders with many important and powerfulcombinations of capability: tactical aviation, land attack systems, SEAL and Marine specialoperations forces (SOF), intelligence and surveillance platforms, amphibious assault and forcibleentry capacity, over-the-horizon force projection, and flexible seabasing and at sea logisticalsupport. Our full spectrum of capabilities also includes ship-based ballistic missile defense—providing a shield that not only protects our maritime freedom of movement and access, but3

which also contributes to the defense of our allies and our homeland against missile threats. Inother words, we are presenting a budget which supports a force in high demand across the globe.The President’s Budget does more than just fulfill our responsibilities in today’s complexenvironment; it continues to evolve our portfolio of capabilities. This is essential to our ability todefend against future threats which could range from the asymmetric—from terrorists toproliferation and/or use of weapons of mass destruction—to the more traditional challengesposed by nation-states and possible future “near peer” competitors.Evolving our portfolio of capabilities can be challenging, since the Navy and Marine Corpshave an operational construct that emphasizes forward deployment and presence. Historically,while the bulk of U.S. forces return home after cessation of a conflict or crisis, our maritimeforces often do not. They are continuously present in forward regions, and through their forwardengagement they maintain familiarity with the environment and the characteristics of regionalactors; they also foster and sustain trust and cooperation with friends and allies. Thus when athreat to our national security emerges overseas, it may well be encountered first by the Navyand Marine Corps. Meeting that threat, whether on land, in the air, on the high seas, or under thesea, will require our forces to be in peak fighting condition. They must be ready to fight and winat any time, and to do so at great strategic distance. We have developed a budgetary plan whichaddresses these requirements.We have developed the budget in the face of a demanding and rapidly changing securityenvironment, and there are worrisome trends that bear watching. Nations are developingweapons and systems which seem deliberately intended to threaten our Naval assets, deny access,and restrict our freedom of maneuver. The proliferation of anti-access weapons technology tounfriendly nations is a significant concern. Furthermore, the Department of the Navy, like otherparts of the Department of Defense (DoD), has been a target of aggressive foreign intelligenceand data-collection activities. As such, we need to invest in the capabilities necessary topreserve our technological advantage. Additionally, aside from growing costs and scheduledelays in some acquisition programs, we also struggle with regulatory encroachment and legalchallenges that threaten to undercut our ability to effectively train and maintain readiness. Wemust address these challenges; doing so is fundamental to maintaining our Naval readiness andour capability to defend our Nation.In summary, the Department of the Navy’s FY 2009 budget invests in the Navy and MarineCorps to operate, sustain and develop forces that will remain engaged in the Global War onTerrorism (GWOT), while at the same time preparing the force for the challenges and threats ofthe future. The FY 2009 budget requests $149.3 billion for these purposes. This is a 7 percentincrease over the FY 2008 baseline and is driven by factors such as rising oil costs and thecritical, comprehensive growth of the United States Marine Corps.Priorities for the Department of the NavyThe Department of the Navy is committed to finding solutions that allow the Navy andMarine Corps to balance our current requirements and operational realities with the likely needsof the future. We strive to maintain an agile and flexible force that can not only contribute to4

winning our Nation’s wars but also can assist in preventing future conflict to the extentpossible—whether by dissuasion, deterrence, humanitarian action or disaster relief. As such,our priorities remain consistent with those in previous years. They are to:• Prevail in the GWOT;• Take care of our Sailors, Marines, their Families and particularly our wounded; and• Prepare for future challenges across the full spectrum of operations.As in the past, for the sake of brevity, some of the key programs are highlighted and can befound in greater detail in the Highlights of the Department of the Navy FY 2009 Budget. 1 Thisstatement is designed to reinforce, and build upon, initiatives articulated in previous testimonyand budget material.II. Prevail in the Global War on TerrorismThe Department’s top priority remains the Global War on Terrorism. Today, approximately29,300 Marines and 11,300 Sailors (including individual augmentees) operate ashore, along with12,000 Sailors at sea. They are conducting and supporting operations in Iraq and Afghanistan,and throughout the U.S. Central Command region, and their contributions are central to theprogress being made.Naval forces provide a major part of the national worldwide rotational presence and anincreasing portion of the required support for ground units in OPERATION ENDURINGFREEDOM (OEF) and OPERATION IRAQI FREEDOM (OIF). They operate across thespectrum—from low intensity conflict, humanitarian assistance and disaster relief, to highintensity conflict involving airborne strike and Marine Corps forces in coordinated joint andcoalition ground operations. To illustrate the wide range of activities undertaken, it isnoteworthy that, in 2007, five Carrier Strike Groups and five Expeditionary Strike Groupsdeployed in support of OEF and OIF. Throughout 2007 the Marine Corps provided threeembarked Marine Expeditionary Units (MEUs) forward positioned in all geographic commands.Two of these MEUs were employed ashore in support of Multi-National Force-West andparticipated in sustained combat operations. Naval aviation, afloat and ashore, in concert withU.S. Air Force and coalition aviation forces, has provided critical strike, overland surveillance,logistical and electronic warfare support to the joint land forces deployed in Iraq and Afghanistan.The Navy has also deployed riverine forces for the first time since Vietnam, operating on LakeThar Thar and the Euphrates River. The Marine Corps also achieved a milestone with successfuldeployment of the first MV-22 Osprey squadron in OIF operations. Naval Special Warfare(NSW) forces continue to be actively engaged in combating terrorism. The Navy SEALs and theMarine Special Operations Command have done outstanding work in OIF/OEF and have madecritical progress in countering the threat of international terrorism. We will continue to prioritizeinvestment and retention of our highly skilled special operations forces.In addition to traditional types of maritime activities, the Navy continues to support theGWOT in a variety of non–traditional areas. For example, Navy Sailors are leading a number of1 Highlights of the Department of the Navy FY 2009 Budget, February 2008.5

Provincial Reconstruction Teams in Afghanistan today. Significant numbers of Naval combatsupport and combat service support personnel are relieving the Army and Marine Corps in selectmission areas. In U.S. Central Command, Navy personnel are providing base and portoperations support, medical, explosive ordinance disposal, construction battalions, civil affairs,electronic warfare, mobile security forces, detainee operations, intelligence, and headquartersstaff support. The Navy also continues command of the detainee mission in Guantanamo Bay,Cuba and at Camp Bucca, a high security prison in Iraq. Executive agent responsibilities aredischarged by the Navy for the GWOT-related Combined Joint Task Force Horn of Africa (CJTFHOA) in Djibouti. CJTF HOA has transformed from its initial seafaring force, aimed atblocking terrorists fleeing Afghanistan (and preventing them from establishing new safe havens),into a task force that also conducts military-to-military training and humanitarian assistance overa large geographic expanse of eight countries.With respect to the Marine Corps, the II Marine Expeditionary Force Forward, augmented byMarines from around the Corps, conducted counterinsurgency operations in Iraq and led the Multi-National Force-West in Al Anbar Province, supported by Army, Air Force, and Navy personnel.The achievements of the Marines in Al Anbar have been widely noted, and their success increating a permissive environment for local governance and economic development—makingsignificant inroads in security, training, and transfer of responsibility to their Iraqi counterparts—has been crucial. More broadly across the country, Marine Corps Transition Teams haveconducted training for Iraqi military, police and border teams. The Marine Corps provided over800 personnel across more than 50 types of Iraqi transition teams in 2007. Building upon thesesuccesses in Iraq, recently the President approved the deployment of 2,200 Marines to Afghanistanin support of the NATO-led International Security Assistance Force mission, and 1,000 Marines toassist in the training and development of the Afghan National Security Forces. In preparation forthese overseas missions, the Marine Corps continues to implement comprehensive trainingprograms at home, such as Mojave Viper and Desert Talon.At sea, the effective conduct of Maritime Security Operations is a critical element of the fightagainst terrorism. In the Northern Arabian Gulf, our Sailors and Marines are working withCoalition and Iraqi forces in a Coalition Task Group to defend the Al Basra Oil Terminal and theKhawr al Amaya Oil Terminal. The security of these platforms is provided through waterbornepatrols in Rigid Hull Inflatable Boats, platform security personnel, and helicopter surveillance.Working with our NATO Allies, the Navy continues to provide support for OPERATIONACTIVE ENDEAVOR, which is an ongoing maritime interdiction effort in the Mediterranean.Similarly, the conduct of operations to dissuade and counter piracy off the West African coastand the actions of the guided missile destroyers USS PORTER, USS ARLEIGH BURKE andUSS JAMES E. WILLIAMS off the coast of Somalia this past October are examples of how theNavy is working to provide a secure maritime environment.Fostering enduring foreign partnerships and friendships is yet another key contributor to theGWOT, as we bolster the capacity of nations to work with us, and to conduct counter-terrorismefforts of their own. The Navy is continuing to develop the concept of Global Fleet Station(GFS), envisioned to be a highly visible, positively engaged, reassuring, and persistent sea basefrom which to interact with the global maritime community of nations. The Departmentdemonstrated the concept through the GFS pilot in October, using the HSV-2 SWIFT in the6

Caribbean, and again with the African Partnership Station in the Gulf of Guinea, using the USSFORT MCHENRY and HSV-2 SWIFT. In addition to targeted outreach activities, the Navy andMarine Corps team extends America’s diplomatic reach through the conduct of multinationalexercises and port visits. Throughout 2007, the Naval force participated in over 230 bilateral andmultinational exercises with partners around the globe. 2 The Marine Corps also participated inover sixty Theater Security Cooperation events, which ranged from deployment of small MobileTraining Teams in Central America to MEU exercises in Africa, the Middle East, and thePacific. Additionally, several overseas training events were held with foreign special operationsforces to improve interoperability with Navy and Marine SOF, and the Department providedsupport to the stand-up of NATO’s new SOF Coordination Center. The cumulative effect ofthese exercises and events is to foster trust and sustain cooperative relationships with ourinternational partners. This is critical to U.S. national security.Outreach to foreign populations is also an important part of the Nation’s efforts to stem thespread of terrorism. This is an important mission for the Navy and the Marine Corps and is atangible way that we can demonstrate the compassion and values of the American people. Lastyear, the Navy and Marine Corps together were at the forefront of numerous humanitarianassistance and disaster relief operations. Sailors and Marines in the Pacific provided desperatelyneededhumanitarian support to Bangladesh in the aftermath of Cyclone Sidr. The Marine Corpsengaged in civil-military and humanitarian assistance operations such as “New Horizons” inNicaragua and land mine removal training in Azerbaijan. The joint and combined crew aboardthe USNS COMFORT gave humanitarian aid during a four month tour in Latin America and theCaribbean. During Pacific Partnership 2007, the joint and interagency crew of the USSPELELIU gave similar aid to the Philippines and other Pacific island nations. We hope that thesupport given during these missions, whether it was the Seabees’ reconstruction of homes andschools devastated by a tsunami, or inoculation and treatment of children and the elderly byNavy and Marine medical professionals, helped convey a positive image of the United Stateswith local populations.Finally, within the United States, the Department continues its emphasis on providingincreased force protection to our Sailors and Marines, particularly in the area of counterimprovisedexplosive devices (IED). As lead service for the joint Mine Resistant AmbushProtected (MRAP) vehicle program, the Department accelerated production for MRAP vehiclesto rapidly field this capability in Iraq and Afghanistan. Through the use of Lean Six Sigmaactivities and projects, the Department synchronized an effort to build and transport MRAPvehicles to the theater, rapidly identifying and mitigating deficiencies in the MRAP vehiclepipeline. Over 2,000 MRAP vehicles have been fielded to support the Department’s joint urgentrequirement, over 900 of which are in the hands of Marines and more than 150 fielded to theNavy. Also as part of the broader counter-IED effort, the Department is procuring Biometric2 Illustrative of our global security cooperation are exercises involving the Japanese Maritime Self Defense Forceand the Indian Navy during TRILAX 07 in the Northern Pacific; PHOENIX EXPRESS 07 with Moroccan,Algerian, and Tunisian forces west of the Gibraltar Strait; BALTOPS 07 in the Baltic Sea with Denmark, France,Germany, Sweden, Poland, Russia, Latvia, Lithuania, the United Kingdom, and NATO; AMAN 07 with Pakistan,Great Britain, China, France, Italy, Malaysia, Turkey, and Bangladesh; UNITAS off of South America’s Pacificcoast with Chile, Colombia, and Peru; and MALABAR with forces from India.7

Tools, the Family of Imaging Systems, counter-IED robotics, and Counter Radio-Controlled IEDElectronic Warfare systems.Adapting the Naval Force for GWOT and Future MissionsThe Marine Corps and Navy are being called upon today to conduct surge operations, conductIraq unit rotations, provide additional forces to Afghanistan, and prepare for other challenges.The Department has not only addressed these commitments, but is contributing low supply, highdemand forces (e.g., Explosive Ordnance Disposal (EOD) units) to support the other services andcoalition efforts. Of our deployed EOD teams, over 50 percent operate in support of otherservices. Additionally, over the course of 2007, the Navy provided 12,985 Active ComponentAugmentees and 9,527 Mobilized Reservists in support of OEF and OIF globally, and filledapproximately 8,000 Individual Augmentee and 4,500 “in-lieu-of" requirements. The Navy hasincreased several low density, high demand specialties and units, such as Construction Battalionsand EOD teams. In October 2007, the Navy commissioned its newest Construction Battalionand Construction Regiment, bringing them to a total of 9 active duty battalions and 3 active dutyregiments. Further, in order to relieve stress on Marines and their families, and to address futurecontingencies, the Marine Corps is growing the force, exceeding its 2007 target of 184,000Marines; the Marine Corps is on track to meet the goal of 202,000 by FY 2011.Reshaping of the force is an important and evolutionary process. To do this, the Departmentis focused on three fronts: recruiting the right people, retaining the right people, and achievingtargeted attrition. Recruiting objectives are focused on increasing the quality of the Total Forceand seeking qualified Sailors to include special emphasis on filling the ranks of SEAL, NSW,Navy Special Operations, Special Warfare Combatant-Craft Crewmen, EOD, Divers, HospitalCorpsmen, and Women in Non-traditional Ratings (Master-at-Arms and Seabees). Recruitersare also focused on creating a smooth flow of recruits into boot camp by maintaining andmentoring a healthy pool of young men and women in the Delayed Entry Program.The Department has also implemented initiatives to increase visibility and incentives formedical recruitment. While we have seen improvement in some medical programs, such as inthe Nurse Corps with direct accessions, numerous challenges remain in recruiting and retainingmedical personnel. Retention challenges exist in critical specialties that require 3-7 years oftraining beyond medical school. In the Dental Corps, we face challenges in retaining juniorofficers between 4-7 years, and we also are experiencing high attrition rates for junior officerranks in the Nurse Corps. To combat the recruiting challenges and continue supporting theincreased demand for the OIF/OEF, we implemented increased accession bonuses for the NurseCorps and Dental Corps; funded a critical skills accession bonus for medical and dental schoolHealth Professions Scholarship Program (HPSP) participants; increased the stipend for HPSPstudents, as well as Financial Assistance Program participants; expanded the critical skillswartime specialty pay for reserve component medical designators; recently implemented aCritical Wartime Skills Accession bonus for Medical and Dental Corps; and implemented aCritical Skills Retention bonus for clinical psychologists.We note that the FY 2008 National Defense Authorization Act (NDAA) restricts military tocivilian conversions for the medical community through September 30, 2012. Due to the date ofenactment of this legislation, it is not reflected in the FY 2009 President’s Budget request, but8

the plan is now being readdressed. Resolution will require careful planning, and we are workingclosely with the Office of the Secretary of Defense on this matter.Incentive programs were a key component of our enlisted recruiting success in 2007. Theenlistment bonus continues to be our most popular and effective incentive for shaping ouraccessions. The authority to pay a bonus up to $40,000 made a significant contribution to ourNavy Special Warfare and Navy Special Operations recruiting efforts. Likewise, our ReserveComponent success would not have been possible without the availability of enlistment bonuses.Extended incentive authorities towards some of our more specialized skill fields, includingnuclear and aviation, will help to recruit and retain these critical skill sets, while renewal ofaccession bonuses will help to expand the force to newly mandated levels. The continuedsupport of Congress in the creation of flexible compensation authorities affords the Departmentthe tools that will help shape the force for the 21 st Century.The Grow the Force mandate by the President is a long-term plan to restore the broad range ofcapabilities necessary to meet future challenges and mitigate global risk to national security ofthe United States. The Marine Corps will grow the force by 27,000 (from 175K to 202K)Marines over five years. This additional capacity and capability will enable full spectrummilitary operations in support of allies and partners as well as against potential enemies. In2007, the Marine Corps added two infantry battalions, capacity to the combat engineer battalionsand air naval gunfire liaison companies, and planned the training and infrastructure piecesnecessary to build a balanced warfighting capability. The Marine Corps has achieved success inrecruiting and maintaining quality standards. This is a remarkable achievement for an allvolunteer force during a sustained war. The Marine Corps anticipates continued success inmeeting recruiting and retention goals to achieve this planned force level. This end strengthincrease addresses more than current operations in Iraq and Afghanistan. It ensures that theMarine Corps will be able to deal with the challenges of the Long War and will reduce combatstress on Marines and their families by moving towards a 1:2 deployment to dwell ratio.Currently many Marines are on a 1:1 or less deployment to dwell ratio.Navy and Marine Corps Reserves continue to be vital to successfully fighting the GWOT andin accomplishing routine military operations. The Marine Corps and Navy activated,respectively, 5,505 and 5,007 reservists to fulfill critical billets in OIF and other gaps inheadquarters and operational units. At the close of FY 2007, the Navy and Marine CorpsReserves end strength was 69,933 and 38,557 respectively.ReadinessThe Department’s budget reflects a commitment to properly price and fund readiness to meetthe demands of the Combatant Commands. For FY 2009, the Fleet Response Plan (FRP) isfunded to achieve “6+1”—the ability to support deployment of six carrier strike groups within 30days and one additional group within 90 days. Additionally, the FY 2009 budget funds 45underway steaming days per quarter for deployed forces and 22 underway days per quarter fornon-deployed forces. For the Marine Corps, equipment readiness accounts are focused onsupporting the operational and equipment readiness of units engaged in operations in OIF. TheMarine Corps has made tradeoffs in this area by cross-leveling equipment from units not in the9

fight, and while the force made great strides in its overall readiness to conduct counterinsurgencyoperations, this has been achieved at the expense of other traditional training, such as amphibiousassault and jungle warfare.Carrier Waiver. The Navy is committed to maintaining an aircraft carrier force of 11.However, during the 33-month period between the planned 2012 decommissioning of USSENTERPRISE and the 2015 delivery of the USS GERALD R. FORD, legislative relief isrequested to temporarily reduce the carrier force to ten. Extending ENTERPRISE to 2015 wouldinvolve significant technical risk, challenge our manpower and industrial bases, and requiresignificant resource expenditure; with only minor gain for the warfighter in carrier operationalavailability and significant opportunity costs in force structure and readiness. The Navy isadjusting carrier maintenance schedules to meet the FRP and ensure a responsive carrier forcefor the Nation during this proposed ten carrier period.Law of the Sea Convention. It is critically important to the United States and our friends andallies that the seas of the world remain safe and open for all nations. Accordingly, theDepartment of the Navy supports U.S. accession to the Law of the Sea Convention. The Treatycodifies important principles of customary international law, such as Freedom of Navigation andrights of passage. Joining the Convention, with the declarations and understandings reflected inSenate Report 110-9 (Senate Foreign Relations Committee), will assist the United States toexercise its leadership role in the future development of open oceans law and policy. As a nonparty,the United States does not have full access to the Convention’s formal processes (throughwhich over 150 nations participate in influencing future law of the sea developments). Byproviding legal certainty and stability for the world’s largest maneuver space, the Conventionfurthers a core goal of our National Security Strategy to promote the rule of law around theworld.Suppression of Unlawful Acts (SUA). The Department supports expeditious U.S. ratificationof the 2005 Protocol of the Convention for the Suppression of Unlawful Acts against the Safetyof Maritime Navigation and the 2005 Protocol to the 1988 Protocol for the Suppression ofUnlawful Acts against the Safety of Fixed Platforms Located on the Continental Shelf ("SUAAmendments"), adopted by the International Maritime Organization on October 14, 2005, andsigned by the United States on February 17, 2006. The SUA Amendments significantlystrengthen the legal regime to criminalize terrorist acts and combat weapons of mass destructionproliferation in the maritime domain making them an important component in the internationalcampaign to prevent and punish such acts.Encroachment. A critical readiness issue is our ability to be prepared to meet the full spectrumof operations that may arise globally. This requires that we have the ability to properly train oursons and daughters in a manner that effectively prepares them for the threats they may encounter.In order for Naval forces to be able to meet our operational commitments we need installationsand ranges, the ability to continue to use them for their intended purposes, and the ability toaugment them when necessary to respond to changing national defense requirements andcircumstances.10

We appreciate the action taken by Congress to recognize the importance of protecting Navalinstallations from encroachment pressures by enacting section 2863 of the FY 2007 NationalDefense Authorization Act that establishes prohibitions against making certain military airfieldsor facilities, including Marine Corps Air Station Miramar, available for use by civil aircraft. Weseek your continued support to move forward with plans for the Outlying Landing Field (OLF)that is critically needed to support training requirements for Carrier Air Wing aircraft based atNaval Air Station Oceana and Naval Station Norfolk. The OLF will directly support theDepartment's ability to meet its national defense commitments under the FRP and provide navalaviators critical training in conditions most comparable to the at-sea operating environment theywill face. In response to public comments regarding the previous site alternatives, the Navy hasterminated the draft Supplemental Environmental Impact Statement (EIS) and will initiate a newEIS that examines five new site alternatives, three in Virginia and two in North Carolina, basedupon new information provided by officials in those states. I ask for your continued support aswe work with the Congress and the States of Virginia and North Carolina to preserve andimprove the installation and range capabilities needed to properly train our young men andwomen before we send them into harms way.Marine Mammals and Active Sonar. The most critical readiness issue relates to the Navy’sability to train using active sonar while minimizing the effect on marine mammals. One of themost challenging threats that our Naval forces face is modern, quiet diesel-electric submarines.These submarines employ state-of-the-art silencing technologies and other advances, such asspecial hull treatments, that make them almost undetectable with passive sonar and also reducetheir vulnerability to detection with active sonar. A diesel-electric submarine so equipped cancovertly operate in coastal and open ocean areas, blocking Navy access to combat zones andincreasing United States vessels’ vulnerability to torpedo and anti-ship missile attacks. Currently,over 40 countries operate more than 300 diesel-electric submarines worldwide, includingpotential adversaries in the Asia-Pacific and Middle East areas. Naval strike groups arecontinuously deployed to these high-threat areas. Training with the use of mid-frequency active(MFA) sonar is a vital component of pre-deployment training. The tactical use of MFA sonar isthe best means of detecting potentially hostile, quiet, diesel-electric submarines. The inability totrain effectively with active sonar literally puts the lives of thousands of Americans at risk.In January 2008, a federal district court issued an injunction precluding the Navy’s ability totrain effectively with MFA in critical exercises scheduled to occur in the Southern CaliforniaOperating Area through January 2009, creating an unacceptable risk that strike groups may notbe certified for deployment in support of world-wide operational and combat activities. Becausethe Composite Unit Training Exercises and the Joint Task Force Exercises off SouthernCalifornia are critical to the ability to deploy strike groups ready for combat, the Presidentconcluded that continuing to train with MFA in these exercises is in the paramount interest of theUnited States and granted a temporary exemption from the requirements of the Coastal ZoneManagement Act for use of MFA sonar in these exercises through January 2009. Additionally,the Council on Environmental Quality (CEQ) concluded that the risk that strike groups might notbe certified constituted an emergency circumstance requiring alternative National EnvironmentalPolicy Act arrangements. These alternative arrangements were accepted by the Navy. Despitethese developments, the trial court refused to set aside the injunction. As a result the Navyappealed the court’s refusal to give effect to the President’s and CEQ’s actions by dissolving the11

injunction and the court’s failure to properly tailor the injunction in the first place to allow theNavy to train effectively. On February 29, the Ninth Circuit upheld the trial court.Acknowledging the Chief of Naval Operations’ (CNO's) concern that the injunction issued bythe trial court in its current form will "unacceptably risk" effective training and strike groupcertification, however, the Ninth Circuit also temporarily and partially stayed several features ofthe injunction. This temporary and partial stay should allow us to complete two trainingexercises this month, which are critical to preparing two strike groups for deployment.The Department continues to be a good steward of the environment, while providing thenecessary training that is essential to national security and ensures the safety of our people. TheDepartment is engaged in a comprehensive effort to ensure compliance with the NationalEnvironmental Policy Act, Marine Mammal Protection Act, Endangered Species Act, CoastalZone Management Act, National Marine Sanctuaries Act, and Executive Order 12114. TwelveEISs are in development with associated Records of Decision (ROD) scheduled for issuance bythe end of calendar year 2009. The Navy implements twenty-nine protective measuresdeveloped in conjunction with the National Marine Fisheries Service, the Federal regulatorresponsible for oversight and implementation of the Marine Mammal Protection Act. Thesemeasures afford significant protection to marine mammals while maintaining training fidelity.The Navy has steadily increased funding for marine mammal research from $12.5 million in FY2004 to $22 million in FY 2009. The Navy's financial commitment constitutes more that half ofthe world-wide funding for research on the effects of anthropogenic sound on marine mammals.Over the past several years, tremendous progress has been made in expanding the scientific baseof knowledge, especially concerning the species identified as the most sensitive to midfrequencyactive sonar, deep diving beaked whales. The Navy, working with the NationalMarine Fisheries Service, is engaged in a three-year controlled exposure study of sound onwhales at the Navy’s Atlantic Undersea Test and Evaluation Center in the Bahamas. This study,along with other research, development, test and evaluation efforts, will provide furtherinformation needed to understand and effectively mitigate the effects of active sonar on marinemammals.III. Take Care of Our PeopleIn 2007 the Department implemented a Human Capital Strategy that focuses on our mostvaluable asset, the Department’s people. In the strategy, the Department addresses the changesin warfare, workforce, technologies, and processes and lays out the strategic objective to produceand employ the right people with the right skills to support or accomplish 21 st Century Navalmissions. The development and retention of quality people is vital to our continued success.The Department of the Navy is committed to sustaining quality of service and quality of lifeprograms, including training, compensation, promotion opportunities, health care, housing, andreasonable operational and personnel tempo. The cost of manpower is the single greatestcomponent in the FY 2009 budget. The FY 2009 budget requests $41.6 billion for MilitaryPersonnel and includes a 3.4 percent Military Personnel pay raise. This investment is critical toensuring a Naval force with the highest levels of ability and character.Comprehensive Care. As Secretary of Defense Gates has stated, “Apart from the war itself, wehave no higher priority (than to take care of our Wounded, Ill, and Injured).” Over the sustained12

combat operations in the GWOT, the Department has endured the loss of over 830 Marines and75 Sailors killed in action, and over 8,500 Marines and 600 Sailors wounded in action. TheseMarines and Sailors and their survivors deserve the highest priority care, respect and treatmentfor their sacrifices. We must ensure our wounded warriors and families receive the appropriatecare, training and financial support they need. Failing them will undermine the trust andconfidence of the American people. Consequently, the Department of the Navy initiated aComprehensive Casualty Care effort in March 2007 to ensure visibility of the full range of needsof service members and their family members and the coordination and expedient delivery ofclinical and non-clinical services throughout the continuum of care. Among the initiativespursued under this effort was a Lean Six Sigma mapping of the casualty care process to identifyareas of patient transitions, gaps in service, and unmet needs across key functional service areasto include: Medical, Pay, and Personnel, Family Support, Case Management, InformationTechnology, and the Disability Evaluation System. The following sections provide somespecific examples of the Department’s actions and plans for improving care for our people.Combat Casualty Care. Navy Medicine provides combat casualty care to Navy and MarineCorps units, on Expeditionary Medical Facilities, aboard casualty receiving/treatment ships andhospital ships, and in military hospitals. Recent advances in force protection, battlefieldmedicine, combat/operational stress control, and medical evaluation have led to improvedsurvival rates for wounded (approximately 97 percent) and enhanced combat effectiveness. InSeptember 2007 Naval Medical Center San Diego stood-up a Comprehensive Combat CasualtyCare Center providing inpatient and outpatient services to all levels of combat casualties,including rehabilitative, mental health and prosthetic care. The unit is the military’s first andonly center for amputee care on the West Coast. This year the Marine Corps is reorganizingMedical Battalions and fielding the Family of Field Medical Equipment, modernizing 34different medical systems such as the Traumatic Brain Injury (TBI) scanner and the AirframeFirst Aid Kit.Wounded Warrior and Safe Harbor. In FY 2007 the Marine Corps expanded its existingprograms by establishing the Wounded Warrior Regiment with a Wounded Warrior Battalion oneach coast to provide better continuity of care for wounded warriors. Specifically, theseorganizations provide wounded warriors a location to recuperate and transition in proximity tofamily and parent units. The Navy has a number of programs ensuring care for all wounded, illand injured Sailors and their families. Those severely wounded, ill, and injured Sailors and theirfamilies receive non-medical case management and advocacy from the Navy’s Safe HarborProgram. Safe Harbor provides assistance in dealing with personal challenges from the time ofinjury through return to duty or transition to civilian life.Post Traumatic Stress Disorder. Specific improvements for post traumatic stress disorderinclude both preventive and post deployment care. The Marine Corps is employing OperationalStress Control and Readiness teams to provide early intervention, outreach, and prevention at theunit level in close proximity to operational missions, reducing stigma associated withconventional mental health care. The Navy is enhancing the Operational Stress Control Programand is completing phase two of the in-theater Behavioral Health Needs Assessment Survey toidentify mental health needs, guide development of appropriate prevention and treatmentprograms, and ensure adequate in-theater mental health support. To date in FY 2008, Navy13

Medicine expanded the Deployment Health Clinic (DHC) concept to a total of 17 Centers.These DHCs logged over 30,000 visits encompassing the entire range of post deploymenthealthcare symptoms. These clinics are designed to be easily accessible, non-stigmatizingportals for effective assessment and treatment of deployment-related mental health issues. Threeadditional DHCs are planned for 2008. Specialized training is also being provided to theChaplain Corps and non-mental health medical personnel to include mind, body and spiritualpractices. Augmenting the ability to deliver the highest quality of Psychological Healthcareavailable, Navy Medicine committed $7 million to stand-up a Naval Center for the Study ofCombat Stress that will support all of the varied and diverse mental health needs.Traumatic Brain Injury (TBI). The Department is engaged in activities to address TBI andremains committed to the further expansion of TBI research and availability of services for ourservice members. Navy Medical Research Command uses new techniques to identifytransmissibility of blast wave energy into the brain, focusing on the nexus between the blastwave energy transmission and the resulting brain pathology. Navy researchers serve on theHealth Affairs Senior Executive Advisory Committee on TBI sensor development andcoordinate closely with the U.S. Army Program Executive Office in the development of helmetmounted monitors. The National Naval Medical Center’s Traumatic Stress and Brain InjuryProgram serves blast-exposed or head-injured casualties aero-medically evacuated out of theater.Over 1,082 blast-exposed service members have been evaluated for psychological health andtraumatic brain injury. In May 2007, Naval Medical Center San Diego stood up a TraumaticStress and Brain Injury Program, and in September 2007, Camp Lejeune stood up a similarprogram.Physical and Medical Evaluation Boards. The Department refined the physical and medicalevaluation board process to ensure timely, comprehensive and transparent actions balancing therights of the individual and the needs of the service. Actions include upgrading the Council ofReview Board website to provide transition services and links to government agencies with postservicebenefits. Additional upgrades are underway to provide a portal for members to monitorcase processing. The Department is also participating in the joint DoD-VA Disability EvaluationPilot in the National Capital Region that is designed to further streamline the process and ensurea smooth transition to civilian life for service members leaving active duty.Family Readiness. The Department remains committed to the readiness and resilience of Navyand Marine Corps families, including the spouses, children, parents, and other extended familymembers committed to caring for Sailors and Marines. To that end, the Departmentoperationalized family support programs to better empower Sailors and Marines to effectivelymeet the challenges of today's military lifestyle. The Marine Corps is redesigning and enhancingfamily readiness programs that most directly prepare Marines and their families, including: UnitFamily Readiness Program, Marine Corps Family Team Building Program, Exceptional FamilyMember Program, School Liaison Program, and Children, Youth and Teen Program. As acompanion effort, the Marine Corps will address quality of life deficiencies at remote andisolated installations, expand communication connections between separated Marines and theirfamilies, and make needed improvements to quality of life facilities and equipment throughoutthe Marine Corps. The Navy increased emphasis on prevention, education, and counseling toNavy families undergoing frequent and often short notice deployments. It has created school14

liaison positions to work with school districts and Navy families to ensure teachers and otherschool officials understand the pressures and issues facing military children. The Navy providesbrief, solution-focused clinical counseling services to more family members, as well asincreasing home visitation services to new parents who have been identified as requiringparenting support. To better reach Individual Augmentee families who do not live near amilitary installation but who have access to a computer, the Navy has begun virtual IndividualAugmentee Family Discussion Groups to ensure outreach information, referral and ongoingsupport.The Department has developed an aggressive child care expansion plan, adding over 4,000new child care spaces within the next 18 months. This expansion includes construction of newChild Development Centers (including facilities open 24/7), commercial contracts, andexpanding military certified home care. Combined, these initiatives will reduce the waiting timefor child care from 6-18 months to less than 3 months. To assist parents and children with thechallenges of frequent deployments, an additional 100,000 hours of respite child care will beprovided for families of deployed service members. In efforts to combat youth obesity, the Navyhas implemented a new world-wide youth fitness initiative called “FitFactor” to increase youthinterest and awareness in the importance of healthy choices in life.National Security Personnel System (NSPS). The Department of the Navy has successfullyconverted ~30,000 employees into NSPS, with an additional ~30,000 scheduled to convert by 30October 2008. The DON is already seeing a return on investment: an unprecedented trainingeffort focused on performance management, greater communication between employees andsupervisors, people talking about results and mission alignment, and increased flexibility inrewarding exceptional performance. While mindful of new legislative restraints, maintainingkey human resource elements of NSPS, including pay-for-performance, is vital to the system'ssuccess and the Department's ability to respond to ever-changing national security threats.Safety. Fundamental to taking care of Sailors, Marines and DON civilian employees isestablishing a culture and environment where safety is an intrinsic component of all decisionmaking, both on and off-duty. Safety and risk management are integrated into on and off dutyevolutions to maximize mission readiness and to establish DON as a world class safetyorganization where no mishap is accepted as the cost of doing business.The Secretary of Defense established a goal to achieve a 75 percent reduction in baseline FY2002 mishap rates across DoD by the end of FY 2008. In FY 2007 the DON recorded our lowestnumber of serious operational mishaps and the lowest rate of serious aviation mishaps in ourhistory.One particular challenge that we continue to face is loss of Sailors and Marines to fatalaccidents on our nation's highways—111 in FY 2007. While our rates are actually better thanU.S. national statistics, and FY 2007 was one of our best years ever, we find these lossesuntenable—we can and must do better. In particular, the growing popularity of sport bikes, orhigh powered racing motorcycles, represents our biggest challenge. We are restructuring ourmotorcycle training, and in partnership with the Motorcycle Safety Foundation, we havedeveloped a new hands-on Sport Bike Rider Safety Course. We are also implementing methods15

and technology to more rapidly assess our personnel to accurately identify those individuals athigh risk for private motor vehicle mishaps. They will be targeted for intervention in an effort tofurther reduce mishaps and our DON risk profile.IV. Prepare for Future ChallengesBuilding a Balanced FleetToday’s Navy and Marine Corps must confront threats in the maritime domain ranging fromnear-peer competitors, to non-state and transnational actors, to rogue nations and pirates. Tomeet the challenge the FY 2009 Budget provides for a balanced fleet of ships, aircraft andexpeditionary capabilities with the fighting power and versatility to carry out blue, green, andbrown water missions on a global basis.To ensure affordability and timely delivery of capabilities will require improvements in theacquisition process—ensuring stable requirements and clarity in design criteria, better programmanagement expertise, and new measures to incentivize contractors to complete programs oncost and within schedule, while delivering a quality product for military use. Military use alsoincludes other factors such as habitability conditions that support quality of life, reducedvariability of part types, and supportable logistics and sustainment. In addition, independentcost, schedule, and risk assessments are conducted and used to establish the foundation ofprogram plans.The Department has launched an acquisition improvement initiative, planning for which hasincluded the Secretary, CNO, and Commandant of the Marine Corps (CMC), and which willenforce discipline across the Department without altering existing Office of the Secretary ofDefense and Joint Chiefs of Staff-level processes. Actions comprising the acquisitionimprovement initiative include the following:Acquisition GovernanceLed by CNO/CMC, the requirements phase comprises three “requirements gates:” (1)Approval of Initial Capabilities Document; (2) Approval of Analysis of Alternatives; and (3)Approval of Capabilities Development Document and Concept of Operations. During this phasethe focus is on what we buy and the process ensures completeness and unanimity ofrequirements, agreed upon by top leadership early in the acquisition process.The acquisition phase, led by the Component Acquisition Executive, consists of three“acquisition gates:” (1) Approval of the System Design Specification; (2) Approval to releasethe System Development and Demonstration Request for Proposals; and (3) A SufficiencyReview of the entire program. During this phase the focus is on “how we buy,” emphasizingclear system design specifications, leveraging commonality within parts and systems, and the useof open architecture. During this phase CNO and CMC remain in support of the acquisitionforce to ensure stability in the requirements.16

Each “gate review” includes a comprehensive assessment using detailed metrics to determinethe health of the program and ensures that the program is ready to proceed through the nextphase of the acquisition process. The key benefits are 1) better integration of requirements andacquisition decision processes; 2) improvement of governance and insight into the development,establishment, and execution of acquisition programs; and 3) formalization of a framework toengage senior Naval leadership throughout the review process.Acquisition WorkforceTo reinvigorate the acquisition workforce the Department has aggressively pursuedinvestment in several key areas. Using a model of our total workforce, we’ve identified certainimbalances and redundancies which Systems Commands and Program Executive Officers willinitiate corrective action for in FY 2008. Further, the Department will create a common businessmodel across Systems Commands to allow maximum flexibility of workforce utilization whilesharpening the skill sets of our acquisition professionals. Further, we are creating commontemplates for acquisition program leadership that will ensure adequate staffing of programsthroughout their life cycle. Notably we have adjusted the programmatic leadership structure ofthe DDG 1000 and Littoral Combat ships to benefit from these common templates.Finally, to bolster our acquisition leadership, we have selected a Vice Admiral to serve asPrincipal Deputy Assistant Secretary for Research Development and Acquisition.FY 2009 Acquisition ProgramsShipbuilding. The FY 2009 shipbuilding budget provides for seven new ships: one VIRGINIA-Class (SSN-774) nuclear-powered attack submarine, one DDG 1000 Destroyer, two LittoralCombat Ships (LCS), two Dry Cargo Ammunition (T-AKE) ships and one Joint High SpeedVehicle (JHSV). The Navy also will procure an additional JHSV for the Army in FY 2009. Thebudget also includes the next increment of funding for CVN-78; research and development fundsfor CG(X), the future cruiser; the first increment of funding for the Refueling Complex Overhaulfor the USS THEODORE ROOSEVELT (CVN-71); funding for an engineered refuelingoverhaul for an SSBN; and continued modernization for guided missile cruisers, guided missiledestroyers, submarines and aircraft carriers.Naval Aviation. The Department of the Navy requires a robust aviation capacity includingattack, utility, and lift capabilities. The Department is in the midst of an extensive, long-termconsolidation and recapitalization of aircraft in the Naval inventory to achieve a more efficientand effective warfighting force. The FY 2009 budget requests funding for 206 aircraft. The FY2009 budget supports the acquisition of the F-35 Joint Strike Fighter (JSF), the EA-18G Growler,the MV-22B, the KC-130J, the E-2D; the MH-60, the UH-1Y and AH-1Z helicopters; and thecontinued development of the P-8A Multi-Mission Maritime Aircraft (MMA), the CH-53K andVH-71 programs.The Department will continue to recapitalize our aging inventory with upgrades or newvariants of existing aircraft where suitable and cost effective. For example, the Navy helicopter17

community is replacing six different aircraft with the MH-60R and MH-60S, while the MarineCorps is buying the UH-1Y, AH-1Z and CH-53K to replace older variants of those aircraft.Command, Control, Communications, Computers (C4). Effective C4 capabilities are key toensuring that our forces have accurate situational understanding to enable decision superiority.The Navy and Marine Corps have planned several programs to deliver agile and interoperablenetwork-centric capabilities to ensure success for Naval, Joint and Coalition forces, includingnaval contributions to the National Security Space. The Department is planning the replacementfor the Navy Marine Corps Intranet with the Next Generation Enterprise Network. The MarineCorps is developing the Command and Control Harmonization Strategy. Capitalizing onemerging capabilities such as the Tactical Communications Modernization Program and theVery Small Aperture Terminal, the Marine Corps intends to deliver an end-to-end integrated,cross functional capability across the force.Intelligence, Surveillance and Reconnaissance (ISR). The Navy and Marine Corps are in theprocess of reviewing current ISR capabilities and formulating a long-term ISR strategy. Thisstrategy, when completed, will ensure the Department's current and future ISR capabilities areused to the fullest extent possible and will maximize the use of other services' and nationalcapabilities to enhance the Department's variety of missions. The Marine Corps' use ofDepartment of Army's unmanned aircraft system, Shadow, is an example of leveraging anotherservice’s capability. Shadow meets the Marine Corps requirements for a transportable ISR assetcapable of providing tactical commanders with day and night, battlefield and maritimereconnaissance. The Navy, with unique maritime domain ISR requirements, is integratingmanned and unmanned capabilities with the Broad Area Maritime Surveillance (BAMS)Unmanned Aircraft System (UAS) and the P-8A program. The BAMS UAS will provide apersistent, multi-sensor, maritime intelligence, surveillance, and reconnaissance capability withworldwide access. Additionally, the Department of Navy is working closely with the Office ofthe Undersecretary of the Defense for Intelligence to ensure the current Distributed CommonGround System - Navy and Marine Corp family of systems meet DoD standards, sharetechnology and minimize duplication.Maritime Domain Awareness. The responsibility for Global Maritime Security lies with manydepartments, agencies, and organizations across the spectrum of our government, internationalpartners, and industry. Each of these stakeholders bring a part of the solution, and taking thelead in establishing a global capability from those parts is one of the single most important newsteps of the Department of the Navy. Protection of the global maritime domain is fundamental toour national security, and requires an integrated approach across the Naval forces, with ourFederal maritime partners, with certain State and local authorities, and indeed with the entireglobal maritime community. We have embarked on the organizational behavior changesnecessary to bring those disparate stakeholders together, and are investing in creation of anenduring operational capability for the Nation.Infrastructure InvestmentFacilities. The FY 2009 budget requests $3.2 billion for military construction projects at activeand reserve Navy and Marine Corps bases, a substantial increase over the enacted $2.3 billion in18

FY 2008. Much of the funding growth is to build training and housing facilities to support theMarine Corps growth in end strength over the next five years. Both Navy and Marine Corps willsustain existing facilities at 90 percent of the DoD model requirement.Base Realignment and Closure (BRAC). The FY 2009 budget requests $871.5 million tocontinue implementation of the 2005 BRAC Commission recommendations. This requestinvests in construction (including planning and design) and operational movements at keyclosure and realignment locations. FY 2009 plans may require some adjustment to ensureconsistency with the approved FY 2008 budget.Walter Reed National Medical Center Bethesda. BRAC action 169 called for closure ofWalter Reed Army Medical Center, realignment of tertiary and complex care missions toNational Naval Medical Center Bethesda, and establishment of Walter Reed National MilitaryMedical Center Bethesda. The Department of Defense approved an expanded scope andacceleration of the original program. The Naval Facilities Engineering Command is managingthe EIS for Bethesda and a ROD is scheduled for May 2008.Family and Bachelor Housing. Privatization for housing in the continental United States is onits way towards completion. The privatization of unaccompanied housing is proceedingsmoothly at our first pilot project in San Diego. The construction of new apartments is wellunderway with completion of the first building scheduled for December 2008. Moreover, theproject won an industry customer service award in its first year of operation in recognition of thedramatic improvement in resident satisfaction in existing housing that was privatized. We havebroken ground on our second pilot project in Hampton Roads in our effort to bring the benefitsof bachelor housing privatization to Sailors on the East Coast. This year's budget reflects thecontinuation of the Marine Corps’ quality of life initiative to construct additional housing toaddress the substantial, long-standing shortfall of adequate housing for single Marines. Theobjective is to provide quality bachelor housing for all sergeants and below for our ‘pre-grow theforce’ end strength by FY 2012 and to support 202,000 Marines by FY 2014. Our FY 2009budget request also includes a military construction project to replace bachelor housing at NavalStation San Clemente, completing elimination of inadequate bachelor housing in the Department.Wounded Warrior Housing. The Department of the Navy completed inspections of all housingfor wounded, ill, and injured to ensure quality and accessible living quarters. Annual inspectionswill ensure continued oversight by Department of Navy leadership. In addition, WoundedWarrior Barracks are under construction at Camp Lejeune and Camp Pendleton. Both barrackswill provide 100 two-person American with Disabilities Act compliant rooms allowing for surgecapability.Marine Corps Relocation to Guam. The FY 2009 budget continues detailed studies, plans andenvironmental analyses for the U.S./Government of Japan Defense Policy Review Initiative(DPRI) to relocate about 8,000 Marines and their dependents from Okinawa, Japan to Guam by2014. The facilities, housing, logistics and environmental requirements are being developedfrom the ground up to support mission requirements as well as business-case prudence. Themeasured investment in FY 2009 is crucial to the five-year $10.27 billion ($4.18 billion from the19

U.S. and $6.09 billion from the Government of Japan) construction program scheduled tocommence in FY 2010.Naval Station Mayport. The Navy is preparing an EIS that examines several alternatives forbest utilizing the facilities and capabilities of Naval Station Mayport after the retirement of theUSS JOHN F KENNEDY (CV 67). The options being evaluated include:o Cruiser/Destroyer (CRUDES) homeportingo Amphibious Assault Ship (LHD) homeportingo Nuclear-Powered Aircraft Carrier (CVN) capableo CVN homeportingo Amphibious Ready Group (ARG) homeportingPreparation of the Mayport EIS is on schedule. The draft EIS is scheduled for release in March2008, with the final EIS expected in December 2008 and the ROD in January 2009.Environmental StewardshipEnergy Initiatives. Energy efficiency is key to reducing life cycle costs and increasing thesustainability of installations and facilities. The Department has led the way in supporting theEnergy Policy Act of 2005 (EPAct05) by adopting the Leadership in Energy and EnvironmentalDesign (LEED) Silver standard as a primary consideration for all DON military constructionprojects. Using the LEED Silver standard, new energy-efficient projects have been completedon several installations, including Recruit Training Center Great Lakes and Naval AmphibiousBase Little Creek. DON also has a comprehensive energy program responding to therequirements of EPAct05 and Presidential Executive Order 13423, evidenced by an 8.85 percentreduction in FY 2007 energy consumption and an extensive renewable energy program.Minimizing the overall environmental effects. The recently-announced Low-ImpactDevelopment (LID) policy is an example of how the Department is emphasizing reduction ofimpact to the environment. The goal of the policy is “no net increase” in the amount of nutrients,sediment, and storm water escaping into the watersheds surrounding facilities and installations.The use of cost-effective LID Best Management Practices such as rainwater collection systemsin construction and renovation projects is central to achieving this goal.Alternative Fuels. The Department has been a leader in the use of alternative fuels. The Navyand Marine Corps both reduced petroleum consumption in their vehicle fleets by more than 25percent from 1999 to 2006, and together used almost two million gallons of biodiesel in 2006.Further gains in alternative fuel implementation will be supported by the Department’s newPetroleum Reduction and Alternative Fuel Vehicle Strategy, which challenges the Navy andMarine Corps to build on already substantial progress to meet and exceed the established Federalgoals contained in Executive Order 13423 and the Energy Independence and Security Act of2007. We are also expanding our use of alternative fuels in our tactical fleet, to include ships,aircraft and ground vehicles. In FY 2009 we will lay the groundwork for a testing andcertification program for alternative fuel use. The Navy is also actively pursuing energyconservation initiatives, through energy conserving alterations in propulsion plants andconservation practices in operations.20

V. Management Process ImprovementComplementary action to our acquisition improvement initiatives is our commitment toenhance process improvement across the Department of the Navy to increase efficiency andeffectiveness and responsible use of resources. The Enterprise Resource Planning (ERP)program, planned for implementation throughout the Department, began initial implementationat Naval Air Systems Command in October 2007. It is an integrated business managementsystem that modernizes and standardizes business operations and provides management visibilityacross the enterprise. The Department continues to champion the use of Lean Six Sigma as theprimary toolset as a means toward increasing readiness and utilizing resources efficiently. Over4,420 leaders have completed Lean Six Sigma training, and there are over 2,000 projectsunderway. The Department's Financial Improvement Program leverages ERP and strengthenscontrol of financial reporting. The Marine Corps expects to be the first military service toachieve audit readiness.A major process improvement initiative to ensure that the Department applies fundamentalbusiness precepts to its management is the Secretary of the Navy’s Monthly Review (SMR). TheSMR is a senior leadership forum, involving CNO, CMC and Assistant Secretaries, designed toafford greater transparency across the Department and set into motion actions that garnermaximum effectiveness and efficiency for the Department. The SMR reviews a portfolio of thebulk of Department activities and programs involving manpower, readiness, acquisition,infrastructure, etc. Using Lean Six Sigma tools and other business tools, this forum reviews themost urgent issues and discusses and implements appropriate solutions. Ultimately, this monthlyinteraction serves as a means to synchronize the Department’s actions to comprehensivelyaddress complex problems, accomplish strategic objectives, and better position for challenges inthe future.The Department will incorporate the Chief Management Officer (CMO) into the Secretariat inFY 2008. The CMO will have responsibility for improving Department business operations tocarry out objectives. These initiatives are all steps to make process improvement a way ofthinking in carrying out daily business throughout the organization.VI. ConclusionThank you for this opportunity to report to you on the Department of the Navy. I provide theFY 2009 budget to you and ask for your support for this plan that will enable the Department toprevail in GWOT, take care of our people and prepare for future challenges. The uniformed menand women of the Department of the Navy, and our civilian workforce, depend on our collectivesupport and leadership. I appreciate the opportunity to set forth the President’s FY 2009 Budgetand look forward to working with you in furtherance of our maritime capabilities and ournational security.21